Standing Committee A

[Mr. Jimmy Hoodin the Chair]

Clause 3

Deductions from contributory allowance: supplementary

Danny Alexander: I beg to move amendment No. 204, in clause 3, page 3, line 30, leave out paragraph (b).
I will be relatively brief. I am grateful to the Association of British Insurers for drawing to my attention a potential problem with subsection (3)(b). The ABI is concerned that, unless action is taken to amend the provision, many thousands of people with long-term health problems could be at risk of seeing the income from their former employment dramatically reduced.
As the Committee will know, income protection insurance provides people on long-term sickness absence, for example, with a regular monthly payment to keep their overall income at just below the level that it would have been had they been in receipt of wages. In setting the premiums that people pay for such insurance, the insurance industry currently takes the levels of incapacity benefit into account. That is because a person whose employment has not been terminated and who receives incapacity benefit and payments under income protection insurance purchased for them by their employer, does not have their incapacity benefit reduced by the amount of their income protection insurance. However, there is concern that the way in which the clause is drafted will mean that that insurance will be taken into account. That could raise premiums, discourage people from taking out income protection insurance and, in particular, discourage employers from taking out such insurance on behalf of their staff. I hope that the Minister can offer some reassurance on that point.

Jim Murphy: Thank you, Mr. Hood, for chairing our short proceedings this morning. From talking to hon. Members on both sides of the Committee, I know that there is an eagerness to make progress and to reach the later clauses that contain much of the substance of the Bill. I shall therefore take some encouragement from the hon. Gentleman and seek to be relatively brief in this response and, where possible, in others this morning.
I hope that I can reassure the hon. Gentleman on the point that he has raised. As he knows, the amendment would change the definition of “pension payment” by removing the reference to insurance payments that would be deducted from contributory employment and support allowance. The current legislation on IB allows certain insurance payments to be deducted, and the Bill allows for regulations setting out which insurance payments will be deducted from contributory benefit.
The regulations under the existing provision draw a distinction between payments that are made under insurance in respect of long-term ill health or disability, which are made while the person is still employed and are, therefore, equivalent to a form of sick pay, and payments that are made after employment has ended, which are more like a pension payment. Only the second type of payment will be deducted, and I hope that I can reassure the ABI on that through the hon. Gentleman. We shall not seek to deduct insurance payments funded by the employer and paid to an employee whose employment has not come to an end.
Before the rule was introduced into incapacity benefit, the principle was discussed with the ABI, which agreed that it was sensible, and we intend to bring the rule forward into the new benefit. The regulations under the clause will have exactly the same effect as the current rules, and we do not intend to extend the provision to other types of insurance payments or to payments made while a person is still in employment. With that, I hope that the hon. Gentleman will consider withdrawing the amendment.

Danny Alexander: I am grateful for that response and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Tim Boswell: Good morning, Mr. Hood. I need not detain the Committee long on this issue, but I just want to pause on one aspect on which I have not tabled an amendment. In a sense, it follows on from the exchanges that we have just had about the definition of what are and what are not pension payments. You would certainly not thank me for extending the debate to cover wider issues, such as the set-off of pension payments and entitlements that former employees may receive before they reach retirement age and whether those should be partially stopped for incapacity benefit. On the other hand, as our earlier exchange indicated, there are concerns about what constitutes a pension payment.
Again, I do not need to give the Committee an elegant essay on the changing definitions. I happen to be an avid listener to Classic FM when I am in the car and it has a number of advertisements that talk about annuities. Clearly that word has modified from its 16th century origins as annual payments to repay money that had been lent to the king. [Interruption.]

Jimmy Hood: Order. I may as well remind hon. Members that I will not tolerate any comments from a sedentary position.

Tim Boswell: I am grateful, Mr. Hood. I promise that I will not try the patience of the Committee. I am merely making the point that words and definitions change over time. Like “annuity”, the word “pension” has changed. If we were having this debate in the 18th century it would be regarded as a somewhat derogatory term because it would be money that the sovereign of the day often paid to people, to use the modern jargon, of working age whom he wished to reward for services rendered. It had nothing at all to do with their retirement. I appreciate that that does not happen now and I would not wish to suggest that we return to that former approach. Nor would I wish to suggest to the Committee that the Department has failed to consult both on the coverage of the disallowances for incapacity benefit, or on these benefits.
Mr. Murphyindicated assent.

Tim Boswell: I see the Minister nodding. But my keen eye, which perhaps should have led me to an amendment, leads me to subsection (3)(c):
“such other payments as may be prescribed”.
That is a wonderful catch-all for authorities to say that they are going to disallow in any case where they think it appropriate. I do not argue with the principle of that. I doubt whether even the present Government—but I will not inflame them—would wish to introduce arbitrary provisions without consultation. It would be useful if Ministers could indicate more or less whether there is any precedent in mind. I have a specific point to mention in this connection.
Subsection (1) refers to “pension payments”, “PPF periodic payments” and
“payments of a prescribed description”,
which we have already debated. There is clearly within the envelope of this some distinction between pension payments and those paid by the Pension Protection Fund in compensation for the absence of a pension. There is also a financial assistance scheme, which is separate from the Pension Protection Fund and is not specified in the clause. I certainly do not wish to pick on the financial assistance scheme or its victims—I regard many of them as victims—who have lost pensions. The common view of the Committee would be that most of them have suffered enough. I am simply concerned about the equity between PPF recipients and FAS recipients. I am anxious to ensure that neither category is treated unfairly.
This may be a class with no members. There may be nobody who would be sufficiently affluent, because of the limited amounts that the FAS has paid out, to suffer in one of these ways. The answer could be—the Minister and his officials may be sharper on this than I am—that no FAS payment would be paid out until after the statutory retirement age. I highlight that as an example of the importance of being fair within the categories. We will not arguethe overall issue about disallowance. We simply want to ensure that the Bill is fit for purpose. Perhaps the Minister would like to reflect on that if he cannot answer it now.

Jim Murphy: I wonder whether, in an attempt to make some progress this morning, I can respond relatively briefly to the detailed points that the hon. Gentleman raises. As he knows, these rules replicate what currently happens under incapacity benefit. Throughout the consultation process, the Green Paper and the build-up to the publication of the Bill there was no significant concern about how the present rules operate, apart from the matter raised in the amendment, which we have already dealt with. We will continue to consult on any future changes.
I have sought reassurances and I can allay the hon. Gentleman’s concerns in respect of the Bill’s ability to take account of changes in the pensions market, in the nature of working life, in Government schemes and in what is available in the private sector. That flexibility is contained in clause 3(2)(b) and (3)(b). I assure the hon. Gentleman that in drafting those subsections it was our intention to give the Bill the flexibility to respond to the evolution of the pensions market. Of course, if, in Committee or on Report, he wishes to identify proposals that he does not think have sufficient flexibility, we shall be happy to discuss them with him. 
In respect of payments from the financial assistance scheme, we take account only of those payments made over the pensionable age, which I think covers the hon. Gentleman’s very fair point.
I have responded to questions this morning rather than reiterating the excellently crafted speech earlier.

Question put and agreed to.

Clause 3 ordered to stand part of the Bill.

Clause 4

Amount of income-related allowance

Danny Alexander: I beg to move amendment No. 151, in clause 4, page 4, line 15, after ‘prescribed’, insert
‘including such premiums as are applicable under paragraphs 11 and 12 of Schedule 2 to the Income Support (General) Regulations 1987’.
Again, I will be brief. I tabled the amendment in order to probe some significant issues of principle and some practical issues which relate to the implications of the proposed abolition of the disability premium for income support. First, I want to clarify the Government’s rationale for abolishing the disability premium and, secondly, to clarify the implications of that abolition for people who may receive it on grounds that are not related to incapacity.
As I understand it, the disability premium for income support that was introduced in 1987 will be absorbed into either the support or the work-related activity components of the employment and support allowance. In a previous Committee sitting we talked briefly about questions arising from benefits implications, about the implications of moving towards a single working-age benefit and about the distinction between benefits that are designed to meet people’s extra costs and those that are designed to compensate for lost income.
My understanding is that the disability premium for income support was, at least in part, designed to help to meet the extra costs faced by people with disabilities. However, the implication of the change proposed in the Bill is that for the vast majority of recipients it will be replaced with a payment that will be conditional on work-related activity, as it will be a work-related activity premium in respect of the employment and support allowance. I should be grateful if the Minister set out, briefly but clearly, the Government’s rationale for making such a significant conceptual change in the purpose of the payment.

Tim Boswell: Does the hon. Gentleman agree that the Minister might like to share with the Committee his thoughts on the likely coverage of the proposal? It is not only the definition but the effect in practice that will interest the many people involved.

Danny Alexander: I am not sure that I can comment on what the Minister might like to do, but I would certainly like him to do that.
Moving on from that principle and rationale, there are some practical implications, particularly for people who are currently, or may in future be in receipt of the disability premium on grounds not related to incapacity. I would be grateful if the Minister clarified briefly the implications of that change. First, will people on means-tested employment and support allowance still be able to receive the disability premium if they qualify for it on other grounds, for instance, if they are registered blind or receiving disability living allowance? Currently, about four in 10 people on incapacity benefit also receive disability living allowance.
Secondly, will employment and support allowance recipients be entitled to a disability premium for their housing or council tax benefit? For employment and support allowance recipients, what will happen to the currently more favourable treatment for people receiving the disability premium such as access to linking rules in relation to benefit, being able to study full-time—returning to a debate we had earlier in Committee—and having a higher earnings disregard, which is £20 rather than £5?
The last question I should like the Minister to address is: will people on other benefits such as means-tested jobseeker’s allowance, or carers or lone parents on income support—in other words, those not in receipt of ESA or IB at the moment, or ESA in the future—still be able to receive the disability premium? In other words, will it still exist for those other classes of benefit recipient? I would be grateful if the Minister clarified those matters.

Jim Murphy: I shall seek, of course, to respond briefly so that we can move the proceedings on.
As we have discussed in Committee already, employment and support allowance is a different way in which to provide financial support to those whose medical condition has been assessed objectively and who are entitled therefore to the new employment and support allowance, either at the work-related activity rate or support group rate. The Committee has spoken about that at some length already.
I think that the hon. Gentleman has acknowledged in previous contributions that ESA cannot be compared directly to past systems, in respect of incapacity benefit. When a claimant meets the personal capability assessment threshold, the new benefit will allow a work-related activity component or support component to be payable after the initial 13-week assessment phase—on the fourteenth week of the claim. That is considerably earlier than in the current arrangements in which the higher benefit rates are payable after a year of incapacity. That is an important change and deserves to be highlighted. It will provide financial support for people away from work for longer.
The new structure will support better those for whom we aim to provide that financial support and encourage those with a limited capability for work to engage in work-related activity, where appropriate of course. Current customers will have their benefit levels protected at their existing rate, and new customers will have their ESA set above the long-term IB rate.
The hon. Gentleman is correct to say that the disability premium does not form part of the new ESA for reasons that we have discussed in Committee already. However, I can confirm that if those on ESA meet the qualifying conditions, they can qualify for the severe and enhanced disability premiums. That is how I understood his questions. The new system will be based on those criteria.
I hope that that explanation has reassured the hon. Gentleman about what people could still be entitled to and again confirmed the structure of the new benefit system in terms of the work-related activity and support groups. I have given the additional commitment that current customers will have their benefits protected and that new customers’ benefits will be paid above the current long-term IB rate.

Danny Alexander: Can the Minister clarify whether people in receipt of means-tested employment and support allowance will still be able to receive the disability premium if they qualify for it on other grounds, such as those not related to incapacity?

Jim Murphy: It is my understanding that that will not be the case, but that those people will qualify for the benefits to which I alluded in my earlier contribution.

Danny Alexander: I am grateful to the Minister for his response. I shall probe the issue later, but I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Danny Alexander: I beg to move amendment No. 5, in clause 4, page 4, line 19, leave out subsection (3).
The amendment is designed to probe the Government’s intentions. Paragraph 59 of the explanatory notes to the Bill gives a comparison by citing paragraphs 7 and 8 of schedule 7 to the Income Support (General) Regulations 1987 that prescribe nil amounts of benefit for certain classes of people. The examples given in the explanatory notes cover certain prisoners and members of religious orders who are fully maintained by their order. I agree that, in both cases, a nil amount would certainly make sense. However, the Bill contains an open power that could be used in many ways. It places no restriction on how the nil-amount regulation could be used in practice.
I should be grateful if, in his response, the Minister could confirm that the categories of prisoners and members of religious orders fully supported by their order that were given as examples in the explanatory notes were the only circumstances in which he foresees the power being used. If not, can he give the Committee an idea of how the scope for the use in practice of the regulations would be limited? It is important that that is made clear for the Committee.

John Robertson: Will the hon. Gentleman clarify his argument? If his amendment were successful, would he be happy that that would allow prisoners to receive support and allowances?

Danny Alexander: No. I am grateful for the hon. Gentleman’s intervention as it allows me to clarify my point. The examples of when to allow a nil amount to be prescribed are reasonable. The purpose of the amendment is merely to probe the Government’s intentions as to whether they want to use the power in a wider class of cases.

Tim Boswell: Clearly, I support the hon. Gentleman in his wish to probe such matters. I wish to make two points—one narrow in application and one that is more general. The narrow argument has been emphasised by my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) in several parliamentary questions. It is that the Department for Work and Pensions has, to put it mildly, not a good record at capturing, recovering or stopping the payment of benefit when persons are in prison. I accept that we should not debate that issue today, but I hope that the Minister will bear it in mind.
As for my general point, it would be helpful if the Minister could communicate at leisure with members of the Committee about foreign entitlements. I do not wish to signal a negative view about such matters. I have a neutral view. Many foreign people of working age come to this country because they are from countries that are now members of the enlarged European Union. Many of those people seek work, although it is unlikely that, in respect of those from Romania and Bulgaria, they shall be able to obtain it without separate work permits. I am not clear about their entitlement under the arrangements. The issue has not been widely rehearsed. It would be useful if the Minister could take that point away, reflect on it and advise members of the Committee about who would be entitled to claim such benefits. I am not talking about people who are in prison, but the wider class of people. Will he say in what circumstances that would be curtailed and withdrawn? It is easy for people to go into the saloon bar and share views about such matters, but it important that the matter is clarified.

Jim Murphy: In the spirit of this morning’s sitting, I shall respond briefly to the specific points that have been raised so that progress can be made. I was relieved on behalf of the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) when he sought to emphasise early in his comments that this is a probing amendment. Giving prisoners the vote is bad enough, but giving them benefits would be even worse. 
The hon. Gentleman is on the right of his party, so I have no idea whether he speaks for the whole of it. In an uncharacteristic way for current Liberal Democrats, he seems to be at least tempted by some sense of responsibility as well as an enormous sense of enhancing rights in legislation. He knows that I say that in a jovial manner. Unusually for a Liberal Democrat, he comes close to trying to balance the demands for ever-extending rights with at least a modicum of extending personal responsibility. All Committee members should be grateful for that. We are relieved to hear that the Liberal Democrats do not appear to be advocating benefits for prisoners.

Danny Alexander: I do not wish to clarify my position within my party, because that is a matter for others to speculate about. However, just for the avoidance of any further doubt, I make it clear that I am not advocating that prisoners should have benefits. I would have hoped that the Government press officer who briefed one of the newspapers to pass questions on about this issue would have sought, in the same manner that the Minister has, to be generous about the intentions behind the amendment.

Jim Murphy: None of us will speculate where the Liberal Democrats will end up on this issue. I guess that they will end up in all sorts of different places, as they do on many other issues. However, I suspect that your patience will run out shortly if we continue along this line of debate, Mr. Hood.
We use the current power in legislation in relation to members of religious orders, where they are fully maintained by that order, prisoners and people from abroad. People in those situations are provided for by other means and should not get an income-related benefit such as income support or income-related employment and support allowance. The amendment would have the opposite effect by removing our ability to act. Without this power, we could not prevent people in the circumstances that we have alluded to in the explanatory notes from receiving ESA.
I can confirm that the examples that the hon. Gentleman cited, in addition to the one raised by the hon. Member for Daventry (Mr. Boswell), are the areas where we wish to use this power: in relation to religious orders, prisoners and those from abroad who have no entitlement and meet no qualifications in respect of ESA.

Danny Alexander: I am grateful to the Minister for clarifying that, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 4 ordered to stand part of the Bill.

Clause 5

Advance award of income-related allowance

Question proposed, That the clause stand part of the Bill.

Tim Boswell: I have no difficulty with this clause. These are sensible administrative provisions, and the idea of having at least the chance to notify an award in advance, before it comes into effect, is a good one.
I should like to take a moment of the Committee’s time to re-emphasise a point that I made in our opening debates on Tuesday about the importance of information. The clause paves the way for somebody whose applicable amount may rise after the assessment period when they get, for example, a work-related activity supplement or a support component, then to reach the qualifying zone and receive the benefit. There is nothing wrong with that, but it means that they will, in effect, get a piece of paper that says, “From X, you will get Y” before either they are entitled to Y or that payment is made. The problem is a wider issue with which the Minister will be familiar—changes in circumstances. Circumstances may well change in the intervening time, but I am anxious to avoid a situation in which changes in circumstance during the lead-up period become more likely, giving rise to confusion and the clawback of benefits.
We could have a wide debate about the circumstances in which the Department must move against individuals to whom it has overpaid benefits. As a constituency MP, I get a fair amount of traffic—almost the greater proportion of my traffic on departmental affairs—from people who might not have explained that their circumstances have changed. That might be entirely innocent and not at all fraudulent or malicious, but when the Department gets wind of it, it seeks to claw back the benefit.
Nobody wishes to caricature the situation by saying that people have a charter to fail to notify the Department or that they should be allowed to pocket the benefit if they have been careless. I am simply flagging up to the Committee what is, in my view, a slightly enhanced risk. As the award will be conditional and made before the decision comes into reality, it might happen in some circumstances. I doubt that it is unprecedented. It occurs to me that lots of people are told what their pension entitlement will be before they receive it, and a change in circumstances—the death of a spouse, the arrival of a dependant or whatever—might alter that.
Given that the match between what people should get and what they actually get is quite difficult to find, I should like the Under-Secretary’s reassurance that this sensible provision will not make that situation more likely. To put it another way, in framing the regulations and drawing up the operational forms, will Ministers make them as clear as possible to avoid any embarrassment to the people involved?

Anne McGuire: Mr. Hood, I add my congratulations to you on chairing the proceedings along with your colleague Mr. Amess. I have known you for many years to be a fair man, and I hope to know you for many years longer as one. I am delighted to be with my colleague the Minister for Employment and Welfare Reform. If we may reflect on a little past glory, I think it is fair to say that we had two of the sensational wins in 1997 that put us on this side of the room rather than that one.
I also offer a courtesy to the hon. Member for Daventry for an interesting question that is fair in the circumstances. I shall not waste the Committee’s time, because the clause is fairly straightforward, but I assure him that we are very aware that information needs to be clear and accessible at various points in the process. When people are notified of their entitlement, they will be informed of any changes in circumstance that would make their benefit decrease, or perhaps increase, and need to be reported.
We are dealing with a shorter time scale than that of incapacity benefit—13 weeks, which in many respects is more manageable for changes in circumstances. I am sure that the hon. Gentleman would recognise that we try to obtain decisions quickly on changes in benefit entitlement. That is not to say that it always happens, but we always try to minimise disruption to an individual’s financial circumstances. I hope that he will be satisfied by those assurances.

Tim Boswell: Now that we have had the privilege, I welcome the Under-Secretary to the Committee, as we have not had the chance to do so. She is a good friend and has collaborated with me on many disability issues. The quality of her initial contributions suggests very good things for the future. She has made some entirely sensible and helpful comments. If she requires, I can of course attack her politically if it will make things easier, but I do not intend to do so. Having had a good start, let us carry on as we began.

Question put and agreed to.

Clause 5 ordered to stand part of the Bill.

Clause 6

Amount payable where claimant entitled to both forms of allowance

Question proposed, That the clause stand part of the Bill.

Tim Boswell: I shall be even briefer. The provision is entirely sensible. I have looked at the explanatory notes and the helpful graphs, and my feeble mind concludes that the Government intend—I hope—to give people the best outcome from the income-related and contribution-related allowances. The better sum will come out on top, and if necessary, one will be made up to the other, as the graphs indicate. If the Under-Secretary will confirm that conclusion, we need detain the Committee no longer.

Anne McGuire: I am happy to confirm that.

Question put and agreed to.

Clause 6 ordered to stand part of the Bill.

Clause 7

Exclusion of payments below prescribed minimum

Question proposed, That the clause stand part of the Bill.

Tim Boswell: One could reasonably describe the clause as small but perfectly formed. Again, I shall take no more than a moment of the Committee’s time, but it is worth pausing for thought. As I understand the clause, it will prevent separate payments when the entitlement is less than 10p a week. If the entitlement is paid in conjunction with another benefit, such as the disability premium that we have discussed, the amount could be more. The provision appears to hark back to legislation introduced under the previous Government—ours—in 1992. Will Ministers reflect on the number of such payments that would be made in theory, and on whether the payment continues to be appropriate? No one wants to take money away from vulnerable people, but some of them may consider payments of 10p a week to be insulting.
I wonder whether it is a de minimis provision that will need sensible revisiting in due course. If the payment were 50p a week, would it make the slightest difference? I would not rush to put my head on the block by saying that we should change it now because the value of money and the cost of postage have changed. We should not reopen the whole benefit payment issue, but will the Under-Secretary share her thoughts?

Anne McGuire: The hon. Gentleman has raised an interesting issue. It is about getting the balance right. The de minimis level of 10p is appropriate, but I hear his comments, and I am sure that we will reflect on them. However, we see no reason why we should increase the de minimis amount from 10p. He has been around longer than I have in some respects, and he may have seen the value of money decrease or increase over the years. The point is well made, but we will hold to 10p.

Question put and agreed to.

Clause 7 ordered to stand part of the Bill.

Clause 8

Limited capability for work

Jimmy Hood: I have looked at the wide-ranging amendments to clause 8, and at the moment, I do not intend to call a stand part debate.

Jeremy Hunt: I beg to move amendment No. 255, in clause 8, page 6, line 7, after ‘work’ insert ‘or work-related activity’.

Jimmy Hood: With this it will be convenient to discuss the following amendments: No. 256, in clause 8, page 6, line 9, after ‘determined’ insert ‘by a single assessment’.
No. 251, in clause 8, page 6, line 24, after ‘work’ insert ‘or work-related activity’.
No. 252, in clause 8, page 6, line 27, after ‘work’ insert ‘or work-related activity’.

Jeremy Hunt: On the face of it, the amendments are relatively simple. They are based on the question of whether it would be possible to combine the assessment for limited capability for work, as described in the clause, with the assessment for limited capability for work-related activity in clause 9. The amendments would make possible not only one single assessment, but the removal of clause 9.
Mr. Hood, I wonder whether you will allow me some latitude in my explanation of why we tabled the amendments. They touch on one of the two most important themes that I wish to draw to the Committee’s attention in all our 16 sittings. It concerns the fundamental thinking behind the Bill, which is that if we are going to make it easy for disabled people to re-engage in the world of work, two things have to be considered.
The first is the welcome provision in the Bill that gives people additional help to deal with their health conditions and to deal with the challenges that they may face in entering or re-entering the labour market. There are lots of excellent things in the Bill, which have been presaged by the successfully piloted pathways programme. I commend the Government not only on presenting the Bill to the House but on the pathways programme, which has given Opposition Members a great deal of confidence that roll-out can occur practically and successfully.
There is a challenge, however, and it is the complexity of the system. The current benefits system for disabled people is extraordinarily complex, and these amendments attempt represent a small step towards simplifying the processes—not just the complexity of different available benefits, but the assessment processes as well. The report that was published last year—“Improving the life chances of disabled people”—gives an example of a hypothetical person called, I think, Kelly, who becomes disabled in her twenties. It lists all the benefit applications that she would have to make. They include applications to the wheelchair service, to the local council for a disabled facilities grant, and to Access to Work for help in modifying her computer and her desk. There would also be applications for help with housing allowance, to social services for help with a personal assistant, and to the independent living fund, if the PA were going to cost more than a certain amount. The report does not mention that, on top of that, she would have to apply for the disability living allowance, or—if she were not in work—incapacity benefit.

Tim Boswell: Could my hon. Friend not add to his list the question of passported entitlements—for example, to free prescription charges—that might apply on receipt of certain benefits but that would not be automatic?

Jeremy Hunt: Yes, indeed—that is an excellent point. There are so many applicable benefits. I have read that the Minister is apparently the only member of the Government who can name all five members of the Spice Girls—I think that that appeared in The Guardian.

Jim Murphy: It was nine years ago.

Jeremy Hunt: All I would say on that—

Jimmy Hood: Order. The hon. Gentleman asked for some leeway, but I am looking for a reference to the Spice Girls in the amendment paper and I cannot find it.

Jeremy Hunt: I am grateful, Mr. Hood. I was merely pointing out that it was considered to be a great feat of memory that the Minister could remember five Spice Girls, but there are many more than five disability benefits.
Why is that a challenge? The reason is something that the Government often talk about, and which—to their credit—they understand. It is the link between disability and poverty. We know that the proportion of disabled people in poverty—nearly a third of them are of working age—are in income poverty, and the level has risen during the last 10 years, which is of great concern on both sides of the House. It is poverty of that nature that makes the benefits system so vital to some of the most vulnerable and disadvantaged people in society.
The problem with the current system is that it is like an onion with many different layers. If one is disabled, one is completely dependent on it, and one is likely to be dependent on it in one form or another for the rest of one’s life, so one does not wish to risk one’s entitlement to some or all of the benefits. That is why it is dangerous to countenance making the system even more complex.

Tim Boswell: My intervention is supportive, and it will be the last that I shall make, because I agree with my hon. Friend’s line of argument. Does he agree that the Department’s report entitled “Opportunity for all”, which was published this week, indicates not merely the coincidence between disability and lack of employment and poverty, but the knock-on effects on families and children? Typically, children growing up in families where one of the parents is disabled suffer directly in the face of poverty and are most difficult to help.

Jeremy Hunt: As ever, my hon. Friend makes an important point. One of the advances that the Government could make to be more successful in meeting their child poverty targets would be looking at the link between child poverty and disability issues. We should like there to be a specific strategy to make that happen.
Returning to the poverty issue, because it is important, the Minister and the Under-Secretary will know that the Joseph Rowntree Foundation has tried to quantify the additional costs of being disabled netted out from the additional benefits that people receive. Disabled people face an additional £200 per week in costs, ranging from the fact that if they are in a wheelchair, they will not be able to shop around as easily to get the best deals in the shops, as other people can, to the additional costs of laundry, adaptations and so on. Because of those extra costs and the link with poverty, the complexity of the benefit system makes many disabled people fearful of risking the package that is so vital for them.
We have to be careful with this Bill, because although the extra help that it is providing is to be welcomed, it also makes the benefits system even more complicated by replacing incapacity benefit with a new benefit with two elements—a support element and a work-related activity element. I should like the Minister to consider whether anything can be done to simplify the assessment processes.
I should have preferred to debate a much bolder Bill dealing with the transfer to a single working-age benefit, because that would be a huge step towards simplicity. However, the measures that we are talking about have much to commend them, which is why we support the Bill in principle. However, the Minister should consider not just the complexity of the benefits system, but the complexity of the assessment procedures and whether it would be possible to move towards a single assessment process that would be passportable across different benefits so that disabled people did not have continually to go for different assessments for various benefits.

Natascha Engel: We considered the simplification of benefits in Select Committee and came across the big problem of complexity in disability itself. It is not just a matter of disability being physical or mental; if the benefits system were simplified too much, it would not capture people’s disabilities and people with different disabilities would be disadvantaged.

Jeremy Hunt: The hon. Lady makes an important point. It is important that any simplification of the benefits system—the purpose of which, as in this Bill, is to make it easy for people to transfer in and out of work of work depending on their personal situation—reduces the barriers that make them concerned about transferring into work, particularly if they are out of work. She is right; nothing that we do must make it more difficult for us to react appropriately in the benefits system to the extraordinary range of complexity of disabled people’s conditions. If there were a thorough single assessment process considering every aspect of someone’s disability, it would lead to a definitive report that would, in my ideal world, be used by all organs of the state without that person being required to go through the process time and again.
A Mencap report says that 37 per cent. of severely disabled children have to deal with eight or more different professionals from different services, often asking the same questions. Although simplification would not be a quick win for the Government—it is rather complicated to get Departments to talk to each other—it would be an easy win in the sense that it should be a measure that saves money, rather than costs more. The assessment processes are expensive and there would be, on the face of it, an enormous saving to the Government if it were possible to have one single assessment that could be transferred across.
Mr. Hood, you have given me some latitude, for which I am most grateful, but let me return to the specific amendment. I hope that the Minister might consider it. He might have some good reasons as to why it is not possible to combine those two assessments and we will listen carefully to those reasons.
Would it not be possible to have one assessment that—as I understand it—is an assessment of the level of someone’s disability and if that disability is above a certain level so that they have limited capability for work, they are entitled to ESA and if it is above a higher level, they are entitled to the support element under the Bill? Would it not be possible to do that in one assessment, therefore simplifying the process for disabled people, saving the Government money and speeding up the process for everyone concerned?

Danny Alexander: I have considerable sympathy with the hon. Gentleman’s remarks in support of his amendments and want to press the Minister to explore a number of issues on those points. I agree that the benefit system facing disabled people is complex. The hon. Member for North-East Derbyshire (Natascha Engel) is right to point out that disability is complicated and many faceted. Nevertheless the complexity of both the benefit system and the assessment process can create considerable hurdles for many disabled people.
For example, one of my constituents, having had an injury at work, was faced with going to the same medical testing centre in Inverness on three separate occasions over eight weeks to be asked slightly different questions by the same doctor—one visit for incapacity benefit, one for disability living allowance and one for industrial injuries disablement benefit. Such repeated exposure to what—no matter how hard those people who are doing the assessment attempt to make it an easy process and one that people feel comfortable with—can feel like an intimidating and intrusive experience. That is something that, if we can in the course of this Bill, we should try and make simpler if possible. That is not to decry the point about the complexity of disabilities that people face and that one is trying to understand and assess, but to look at whether the assessment process can be made more simple.
That captures the point made by the hon. Member for South-West Surrey (Mr. Hunt) about poverty faced by disabled people, particularly disabled children and their families. In his earlier remarks in Committee, the Minister referred to how he wishes to see the provisions of this Bill used to help address the question of child poverty. That is something that should be in our minds throughout our proceedings—both the complexity of the system and the assessment process and whether that may or may not act as a disincentive to people to take part. Therefore, we need to look at the justification for having separate assessments for limited capability for work and limited capability for work-related activity.
The draft regulations for clause 9 set out the descriptors for the assessment of limited capability for work-related activity—which we will no doubt come to when we debate clause 9 in more detail. They have many common factors with the list of descriptors set out in the “Transformation of the Personal Capability Assessment - Report of the Physical Function and Mental Health Technical Groups” document published by the Department for Work and Pensions about a week ago. The list of descriptors are different in some respects, but similar in many respects.
Therefore, even if it is not possible to consolidate all the assessments, it must be possible to create some type of core assessment that would not just inform limited capability for work-related activity but disability living allowance and industrial injuries disablement benefit assessments. It could also inform assessments for assess-to-work funding. The Bill could be improved if the assessment that people get when they are applying for benefit carried with it an understanding of what level of access-to-work funding someone might be entitled to or what type of adjustments they might be entitled to funding to support.

John Robertson: I have listened intently to the hon. Gentleman and I have great sympathy with what he says. Does he agree, however, that part of the problem is not just the amount of assessment but the people who are doing the assessing and that we can have three different assessments with three different outcomes? It is not the people who are being assessed who are the problem, but the people doing the assessment.

Danny Alexander: I agree with the point that has been made and I would like to table further amendments that I hope we will be debating later today in relation to training for the people who carry out the assessments. With regard to some mental health conditions in particular, lack of training and lack of awareness are a real barrier to getting accurate assessments of the conditions and barriers to work that people face when they have certain conditions or impairments.
I would like to hear from the Minister whether he thinks it is possible to combine these core assessments. I raised this issue with representatives of Atos Origin, which carries out the assessments on behalf of the Government, when I had a very useful visit to its testing centre in Inverness in August. I got the impression that having to make different assessments for different benefits, often for the same people, is sometimes a source of frustration for them as well. This may simply be due to the fact that they have to make different appointments with the same person over a period of weeks. It would be easier for the individual concerned if someone only had to come into the office once, even if they had to undergo a slightly longer assessment.

David Ruffley: Does the hon. Gentleman agree that the hon. Gentleman the Member for Glasgow, North-West (John Robertson) raised a key point when he said that different assessments could give rise to a large number of appeals? The complexity of this new regime is not just bad for the claimant, but could result in many more appeals.

Danny Alexander: I certainly agree with that point and we may wish to debate this later as we go through this clause and clause 9, as I am particularly concerned about the way in which the Government propose to test the new personal capability assessment, which relates particularly to clause 8 on limited capability for work. My understanding is that the testing proposal is simply that the new assessment should be run in parallel with the old assessment. There should be some medical assessors looking at how it works and there should be a study of the outcomes of the two different assessments.
Unless the Minister can clarify this point, I think there that there will be serious questions about whether the criteria that will be used are better. If we consider whether the outcomes are the same—the point that the hon. Members for Bury St. Edmunds (Mr. Ruffley) and for Glasgow, North-West (John Robertson) made in relation to the outcome of assessments and appeals—we see that, in many cases, the current assessments do not work very well as they result in numerous mistaken assessments that result in many appeals, many of which are successful. If all we are doing is seeking a new assessment that is as good as that, our ambitions are very low indeed.
I would like to see a much longer period of study for the proposed new personal capability assessment to make sure that it works properly, and I would like that to be carried out by an independent body. Having the company that is responsible for the assessments making the judgment as to whether the new one works better or not is not desirable.

Natascha Engel: To return to our investigations at the Select Committee, one of the dramatic differences between the personal capability assessment that is now proposed and the medical assessments that are carried out today is the massive cultural shift away from assessing someone’s incapability to do something to considering someone’s capacity to do something. That cultural shift from incapacity to capability will make an enormous difference in the way that people are assessed and will give a far more holistic approach to the way the medical profession view someone who is to be assessed.

Danny Alexander: I should have made it clear that, having studied the documentation in relation to the transformation of the personal capability assessment, it seems to me that a great deal of progress has been made in rethinking the way the assessment works. My point is not that the thinking that has gone into it is not good or that progress has not been made, but rather that the evaluation of this new assessment should be more robust and more independently led than the fairly brief assessment that the Government are proposing.
Given that the Bill is proposing two separate assessments, one for limited capability for work and one for limited capability for work-related activity, which on the face of it seem to be quite similar even though they are intended to reach different decisions, what are the Government’s intentions as to how these two assessments should be carried out? What will be the claimant’s experience? Do the Government intend a claimant to be invited for an assessment for limited capability for work to determine whether they are entitled to ESA and then, once that decision has been made, for another, separate assessment to determine their limited capability for work-related activity? That second assessment would determine whether the person was entitled to the support component or the work-related activity component. How will the claimant experience those two different assessments in practice?

David Ruffley: On that point, is it the hon. Gentleman’s understanding—it is my understanding, although this is not dealt with in the Bill—that the two assessments will be done at the same time, by the same person, in the same room and on the same day?

Danny Alexander: Although it is not in the Bill, that is my understanding. A claimant would go to the medical assessment office, sit down and have their assessments for limited capability for work and work-related activity. At the end of those assessments, the person would leave the room and a decision would be taken about whether they were entitled to the support component or the work-related activity component. Depending on that decision, the person might or might not be invited back into the room for a further, work-related, health-focused assessment to determine the work-related activity to which they were entitled.
If the Government are proposing that the two separate assessments described in clauses 8 and 9 take place seamlessly—at the same time, in the same room and with the same person—I fail to see why they should be subject to two separate sets of regulations. In practice, that could allow a future, perhaps less well-intentioned Government to separate the two assessments and invite someone back to the room on a subsequent day or in a subsequent week or subsequent month for a different assessment to do the same thing. I would be grateful if the Minister could clarify that point and I look forward to his response.

David Ruffley: We all look forward to the Minister’s considered reply, and I should like to hear his response on one final point. Although the issue is not dealt with in the Bill, we understand that the two assessments will be done at the same time or sequentially, within an hour or so of each other, by the same assessor and probably in the same room. Does the Minister agree, however, that there could be a potential conflict in what the assessor teases out from the claimant? A claimant will try to demonstrate that they are unwell enough not to be able to work and that they are eligible for the employment and support allowance, and they know that the first assessment will test their level of unwellness. However, in a very real sense, the next assessment will test something at the other end of the spectrum: what the person can do—their capability.
There seems to be an in-built tension in that arrangement. The first assessment shows unwellness, and the claimant will want to show that they are unwell, because they will want and need the allowance. However, a few minutes later, they will, given that they will be acting in good faith, have to demonstrate some level of functionality, if they have it. That will determine whether they are eligible for the support component or whether they have to go on to the work-related activity component. In the mind of the claimant, that will compromise their responses. I thought about this when I first saw the Bill and it has been confirmed by what some disability and support groups have told me. Claimants will think that if they show too much “capability” in the second assessment, it might compromise their eligibility under the first test about whether or not they get the allowance.
I do not, in any way, say that this is slack drafting or that having two assessments is a ridiculous proposition, because I know that officials and Ministers have put a lot of thought into this during a fairly serious period of consultation since January and the Green Paper. We must make that clear and I must put it on record. There are questions to be asked. We will get to the issue of how much work has gone in, and will go in, to get the new testing regime right, and we will have a debate about piloting. Let us put all that to one side, because it is for another day.
Much thought has gone into the clauses, but I should sum this up again because I feel strongly about it: someone who is asked to show capability in the second test might think, and get worried, that it will compromise what has been decided on the first assessment about whether they get the allowance.

Kali Mountford: It is dangerous to try to put ourselves in the mind of another. My experience is contrary to that mentioned. The people I see making claims for current benefits do the opposite of what the hon. Gentleman is saying. They usually underestimate the difficulties and challenges that they face. They generally put forward the best case of the best day. They do not say, “This is the worst day” and give a proper assessment of their own capacity and incapacity. Perhaps it is time to examine in a more holistic way how an individual operates, not just on a specific day but over a period of time.

David Ruffley: The hon. Lady makes a good point. I know that she had much experience of these matters in her former life. I just want to clarify something. I am not suggesting for a second—I know that she was not putting these words in my mouth—that those who apply for the new allowance will be looking to make a bad fist of it and to exaggerate their illness. She makes the point that claimants will, in good faith, say, “I am not well enough to work and I need the support of this allowance—or incapacity benefit, as it is now”. We all agree on that. She has given examples where claimants will underestimate how unwell they are. That would be assessed in the first test, which is the subject of the clause.
I have also heard a contrary view, which might involve a minority of cases and the hon. Lady might be referring to the majority of cases. I wonder whether a minority of claimants might be stressed. We know that 40 per cent. of claimants currently on incapacity benefit have mental or behavioural conditions. It is at least likely that in a minority of cases there might be an inbuilt tension between showing unwellness and then having to show functionality and capability in the second assessment. People might get a bit confused by that, for perfectly understandable reasons.
I am not suggesting that this is driving a coach and horses through the proposition that Ministers have put forward in this clause and the next one. However, on the basis of both the evidence that I have been given by outside groups and my intuitive reading of the way the clauses are constructed, for what it is worth, it is at least worthy of a response.

Tim Boswell: I shall not detain the Committee to prevent the Minister from responding. I just want to say that the hon. Member for North-East Derbyshire was on to a substantial and good point: we are changing the whole conceptual basis to encourage people to emphasise the positive rather than highlight the negative. That must be welcome, and is across the Committee. We need to be able to deliver it. My concerns are twofold and congruent with what has been said, which I need not repeat.
My first concern is about friction in the process. We must hammer home the point that those people are non-expert, sometimes inarticulate, vulnerable, confused and worried about their situation. Many people come to us as constituency MPs with problems about medical assessments, and with stories that are sometimes well founded, sometimes not. Undoubtedly, the process is stressful, and the more it is simplified and made acceptable to them, the better. One assessment is in principle better than two, and if it is necessary to move from one phase of that assessment to the other, that may be a reasonable compromise.
My second concern is with legal friction, embedded in a clause that I drafted, new clause 6, which we shall debate later. It is about the hat that the assessor wears at any one time, about whether it is clear and fair to the claimant, and about whether the assessors are properly trained. We have all heard stories about doctors who have had an off day. That is not to subvert the system of medical assessment, but to say that there are difficulties. It applies legally, too. With that structure, carefully constructed though it is, there may be huge evidential arguments about whether the assessment was carried out under the terms of clause 8 or clause 9, while the poor claimant says, “I don’t care. All I know is that I went to my doctor, and I didn’t get my benefit.” That is the human side and the legal side.
Finally, there is the conceptual issue. Clauses 8 and 9 bear on the capability for work or for work-related activity. They are not tests about whether work has been carried out or whether work-related activity will be carried out, but prospective tests about a person’s capacity for them. I find it increasingly difficult as I reflect on the issue to see the logical distinction between work and work-related activity. There may be some functional differences, and the Minister will talk to them, but I cannot see the essential difference. If that links into the operational factors, the claimant’s concern, and the difficulty with producing a harmonised and coherent structure whereby it is clear at all times who is doing what to whom and whether the procedure is appropriate, the Committee should at least reflect on whether we have created an unnecessary complication in our effort to help people.

Natascha Engel: I understand that the hon. Gentleman is to visit the Derbyshire pathways to work programme in my constituency. It has been fantastic. He will hear some stories that the Select Committee, and myself as a constituency MP, have heard. The staggering part about the individual human stories that he has discussed is the shift from a tick-box medical assessment of what cannot be done to a more employer-based, support and training-oriented capability assessment. That is exactly what the Bill is about: to ensure that we focus on the job that a person can do, get them job-ready through condition-management programmes, and give them the skills that employers need. The assessment is outside work, but it faces work. That is the crucial difference.

Tim Boswell: The hon. Lady is eloquent. I am very much looking forward to my visit to Derby, I have heard good reports, and I expect to be able briefly to share them with the Committee when I return next week. She is right, and our intentions are all the same. My only worry in simple terms is with a familiar phrase that chills many of our constituents. If one walks into a room and says, “I’m from the Government. I’m here to help you,” that is the danger. The intentions are good; no one questions that. However, we must translate those intentions into a system that achieves our shared objectives.
Debate adjourned.—[Mr. Heppell.]

Adjourned accordingly at twenty-four minutes past Ten o’clock, till this day at half-past One o’clock.